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Sunday, January 31, 2010

Amazon is the leading seller of e-books and it’s hoping to make sure no one else catches up. Last week, Amazon made two announcements. One, it would offer higher royalty payments for authors who use the Kindle platform to publish, and two, it’s releasing new software that lets electronic game developers format their latest creation for sale on the Kindle platform.

Their new royalty structure goes into effect on June 30. According to Internet Retailer, this new structure:

will pay authors a commission of 70% of a book’s list price, minus the net delivery cost. Amazon says authors typically get a 25% commission today on e-books from major publishers. Delivery costs will be based on file size and priced at 15 cents per megabyte...

According to Amazon:

“On an $8.99 book an author could make $3.15 on the standard option and $6.25 with the new 70% option.” The new royalty schedule is double Amazon’s current royalty rate of 35%...

There are a few stipulations.

To qualify for the 70% royalty, an author must price an e-book between $2.99 and $9.99 and the list price must be at least 20% below the lowest list price for a paper copy of the book. The title must also be available for sale in all geographic areas where the author or publisher has rights, Amazon says.

Amazon hopes the move will mean they capture a bigger share of the market. This move isn’t altruistic, but it does mean more profit for authors. From a writer’s POV, that’s a good thing.

Sounds good to me. I have three books on Kindle with another coming out in April. I wonder if that applies when the author's print publisher submits the book to Kindle or if the writer submits the book. And how much of the increase will be passed on by the publisher to the writer? Only time will tell.

JHM - I'm no expert but I imagine your e-book royalties are a percentage of the list price, regardless of what the deal is between Amazon and your publisher. I'm sure it'll be a question to ask when you sign your NEXT contract with them however. :)

Oh, unless your publisher is Macmillan, then you're probably not a happy bunny right now.

But you should check out the brouhaha they have caused by delisting all Macmillan imprints for sale through Amazon (except through 3rd party.) I have links to articles on my blog if you are interested. They have recanted their bullyboy stance already, according to the Washington Post.

This is good news for authors. I need to do more promoting for my books that are on Kindle. They are both priced very modestly, and I think e-books should be less than the paper versions. The major publishers who are still selling e-books for about the same price should rethink their policies.

Believe me, I understand as a consumer how much it stinks to pay fifteen dollars to read something on a 300 dollar device.

But as Helen said, it's not always that straightforward.

People say it's much cheaper to do e-books, so they should BE much cheaper, but the publisher is still paying all the outlay for cover cost, editing, and production, not to mention the advance to the writer. The only thing that's changed is that they don't have to print an e-book.

Should e-books be cheaper than hardback? Definitely. But if the price goes too low, I think you run into a profit margin issue.

Amazon wants everything under 9.99 and is willing to pull books off its website to get make publishers go along. Some Kindle readers boycott anything over 10 dollars and now a few of them are calling for all e-books to be as low as seven, five, even three dollars.

If prices start sliding like that now, it won't be long before that nice 70% royalty doesn't amount to much.

And at this point, it's probably the publishers who will eat the difference. A difference I'm not sure they can afford to have.

This sounds fine for writers, Hel. But this whole publishing business is in such a state of turmoil, and none of us seems to quite understand where it's going. If I publish an e-book through Kindle, do I make more money than print publishing because of the lower prices and better royalties, or do I make less money because few people who might learn of my work own Kindles?

You'd most likely make less money, Bob. More sales perhaps, but less percentage on those sales. The hope is that there would be enough sales to offset the lower amount of money. But you can't eat hope.

This is tough. Being a no-name, my indie romance Kindle book is competing with scores of FREE Kindle books from big names because the publishers have that agreement with Amazon. The lowest indies can list at is .99. There are many of us out there listing at 1.00.In Jan I sold 52 books. My profit is .35 each. In June I would have to list at 2.99 to make 70%, but maybe I won't any because of the higher price. At this point, I'd rather have more readers than 70% of nothing.

Angel Sometimes by Helen Ginger

Angel Sometimes

Helen Ginger

Helen is the author of five books: three non-fiction, a short story anthology and a contemporary fiction, Angel Sometimes. She maintains an informational and interactive blog for writers and a weekly e-newsletter that has been going out to subscribers around the globe for thirteen years. She is an owner-partner and Women’s Marketing Director for Legends In Our Own Minds®, which specializes in creative networking opportunities for companies and groups.